Mexico – the emerging star of the Americas

The 2015 Agility emerging Markets Logistics Index was released today (January 19, 2015) and while China maintains the top ranking once again, perhaps of special interest to Americas’ fans is that Brazil and Mexico are in the top ten.

Brazil slipped a notch to third while Mexico maintained its position of 9th. While Brazil’s economic and infrastructure problems were among the reasons for its slip, Mexico is enjoying a manufacturing boom and is introducing reforms to attract additional foreign investment and thus trade.

Of course, Mexico is riding the wave of regionalization, or near-sourcing, due to its close proximity to one of the world’s largest consumer-based economies, the US. Over 80% of its trade is with the US and the latest government statistics indicate that that share is growing. The latest monthly NAFTA statistics indicate that the value of US exports to Mexico was up by 5.2% over the same period as 2013 and the value of US imports also increased by 8.5% for the same period.

Indeed, NAFTA trade is booming thanks in part to an improving automotive industry and, even more importantly, a growing Mexican economy. For example, among the announcements of 2014 is one from Toyota Motor Sales de Mexico, which announced an investment for US$100m to assemble a new vehicle as of the second half of 2015 at its partner’s Mazda Plant in Mexico. The investment aims to produce and distribute a new vehicle for both the domestic and export markets.

Various industries are opening up to stimulate competition and growth. Perhaps one of the biggest announcements in 2014 was that of Mexico’s oil industry. For 75 years, this industry has been a government-owned monopoly but now it is slowly opening to allow the private sector to invest in oil exploration, development and production. Furthermore, private firms will be able to refine oil, sell it, generate electricity and invest in natural gas.

And what does this mean for logistics providers? Plenty of opportunity. For example, Wallenius Wilhelmsen Logistics (WWL) was acquired Mexican Carlogistics to expand its processing centers for the automotive industry; meanwhile Yusen Logistics launched its ‘Mexico Border Cargo Management’ solution to provide multi-modal, cross-border solutions. Qatar Airways has also introduced twice-weekly freighter services from Doha, Qatar, to Mexico City, Mexico, transporting such Mexican exports as vehicle parts, consumer electronics, oil-derived products, perishables and pharmaceuticals.

Ti is proud to partner with Agility Logistics once again to compile of the Agility Emerging Markets Logistics Index. Now in its sixth year, it has become a leading research paper on emerging markets. To download the 2015 Agility Emerging Markets Logistics Index, please click here. For additional information and questions, please contact Sarah Smith, Ti Commercial Director.